South Dakota Government Blog by Bob Mercer

Monthly Archives: June 2011

As in Jacque Storm. She’s been one of the attorneys on staff at the Legislative Research Council. Now she’s moving to the South Dakota Retirement System, where she succeeds new retiree Wade Hubbard as SDRS legal counsel.

Holy cow! Let me start with a disclosure. While I worked as press secretary in the final term of the Janklow administration, I handled many other duties, including negotiation of the Janklow-era compacts between state and tribal governments in South Dakota for Class III tribal gambling. The Mickelson-era compacts allowed tribes to have up to 250 slot machines and card tables. The Janklow-era compacts allowed up to 250 slot machines and unlimited card tables (because they create jobs for dealers, pit bosses, et cetera). Now Gov. Dennis Daugaard has gone one very big step beyond. After four-plus years of a legal stalemate in federal court between Gov. Mike Rounds and the Flandreau Santee Sioux Tribe, today Daugaard’s office just announced he and FSST have agreed to allow 250 additional slot machines at the Royal River Casino. That is 500 slot machines total at Royal River. Back when the Janklow-era compacts were negotiated, the eight tribes with casinos had about as many slots as there were in Deadwood casinos. In the decade since then, Deadwood numbers have shot up while tribes remained at the same level. Now there’s also a new non-tribal casino a short drive from Sioux Falls at Larchwood, Iowa. Daugaard’s statement reflected that new competition for Flandreau. “We want to bring more visitors to Flandreau, and I am proud to partner with (tribal) President Reider and tribal leadership to make that happen.” Nominations for reconciliation man of the year can probably cease right now.

UPDATE: In response to a reporter’s questions, governor’s aide Tony Venhuizen said state government won’t receive any revenue from FSST’s additional slot machines. Venhuizen also said 500 slots won’t be a new statewide standard for tribal governments. “The governor believes that the state should deal with each tribe as an individual, sovereign nation. He is willing to come to the table and negotiate with the other tribes, just as he did with the Flandreau Santee Sioux, on gaming or any other issue. Those negotiations will differ based on the unique circumstances of each tribe,” Venhuizen said.

Gary Hanson of Sioux Falls had brief but kind words Tuesday about the departure of Steve Kolbeck from the state Public Utilities Commission. Kolbeck, a Democrat, resigned to take a private sector job with 18 months left on his six-year elected term. “It feels like a loss to me,” Hanson said, as he and the other remaining commissioner, Chris Nelson, began deciding who should succeed Kolbeck as PUC chairman. They’re both Republicans, and the governor appointed another Republican, former legislator Kristie Fiegen of Sioux Falls, to the vacancy. She’ll start sometime in August, so the question facing Hanson and Nelson was whether to proceed on the leadership matter without her. Nelson said he telephoned Fiegen. “She was very clear the commission needs to move forward and move forward very quickly,” Nelson reported. With that said, Nelson — who was appointed in January to the seat Dusty Johnson vacated — nominated Hanson as chairman. Hanson is serving his second term, and Nelson praised his “excellent leadership ability.” Legal counsel John Smith asked Hanson whether he had anything to say before the roll was called. “At this juncture I plead the Fifth (Amendment),” Hanson said. The vote was, naturally, 2-0. Hanson then nominated Nelson as vice chairman, saying Nelson showed himself to be “an academic” who has been able to quickly catch up to the commission’s complexities. That vote too was, naturally, 2-0.

Over in Big Sky country, Democratic U.S. Sen. Jon Tester is fighting for 2012 re-election. And South Dakota’s Democratic U.S. senator, Tim Johnson, is coming to the aid of what he describes as “my good friend from Montana” by sending out a fundraising e-mail. He’s asking for $10 apiece to help Tester raise $100,000 by June 30. “Republican special interests found themselves an out-of-touch, do-nothing candidate to throw all their money behind…” is how Johnson talks about Tester’s challenger, U.S. Rep. Denny Rehberg. Why the fuss so early? Rehberg has been in a dead heat with Tester in polls throughout this year.

The Legislature’s Executive Board selected Jim Means of Yankton to the South Dakota Investment Council this afternoon. He succeeds Haven Stuck of Rapid City and was one of four final candidates. The council is the advisory board that works with the state investment office in managing South Dakota’s various trust funds, retirement funds and general cash flow accounts.

The Legislature’s Joint Committee on Appropriations meets today at the state Capitol, and the news probably won’t be good. A report prepared by senior fiscal analyst Aaron Olson for the committee shows tax receipts through May were $3.6 million lower than the Legislature expected. Sales and use tax revenue is almost precisely on the mark in the Legislature’s estimate. But contractor excise tax revenue is $57.5 million through the 11 months of the 2011 fiscal year. That is below the $59.2 million mark for the similar period a year ago and well below the Legislature’s $63 million target for this point. The bottom line in Olson’s analysis is state revenue was trailing the Legislature’s pro-rated estimate by about $3.6 million through May. The committee will kick off its meeting at 10 a.m. with a report from the governor’s budget guru, Finance Commissioner Jason Dilges, on what he sees as the fiscal year-end numbers. The fiscal year officially ends June 30. Contractor excise taxes are charged on construction activity, from public projects to home remodeling, and the slump in that sector suggests the immediate need for greater conservatism in state government spending. The situation almost demands that Gov. Dennis Daugaard impose discretionary reductions on top of the 10 percent cuts the Legislature passed on his behalf last winter.

Former state legislator Kristie Fiegen, R-Sioux Falls, will be Gov. Dennis Daugaard’s choice for the vacancy on the state Public Utilities Commission, according to several sources involved in the selection process. Fiegen, president of Junior Achievement of South Dakota, is at the organization’s annual meeting this afternoon in Sioux Falls. The governor will make the announcement official yet this afternoon, a person close to the governor confirmed. Fiegen, now 48, served in the state House of Representatives for four terms covering the 1993 through 2000 sessions of the Legislature. Daugaard served four years in the Senate during the same span and six years total (1997-2002). The PUC post pays $91,390. All three seats on the commission will be held by Republicans. Fiegen becomes the commission’s fourth woman since the 1970s. Fiegen is married to Tim Fiegen, an associate professor of education at Dakota State University. While in the Legislature, Fiegen served two terms as chairman of the House Health and Human Services Committee. She was never beaten in a legislative election.

UPDATE: She takes office in August, according to the news release issued a few minutes ago by the governor’s office.

A reliable source tells me there’s reason to believe Gov. Dennis Daugaard will announce this afternoon his choice for filling the vacancy on the state Public Utilities Commission. If you visit the PUC’s Internet site (www.puc.sd.gov) today you’ll see the faces of the two remaining commissioners, Republicans Gary Hanson and Chris Nelson. Missing is the mug of Democrat Steve Kolbeck, who left the elected post with 18 months remaining on the six-year term that voters hired him for. (Not that he’s the first lately to do that…he’s following the path set by two Republican past PUC-ers, Dusty Johnson and Bob Sahr.) My best guess — which I’m told is wrong — is that the governor would fill the currently open seat with Andy Fergel, a smart lawyer for the Department of Revenue who ran for the PUC as a politial pup on the Republican ticket back in 1998. I’m sticking with two parts of the guess, however: The governor’s choice will be a Republican and will be someone willing to run on the statewide ticket. The appointee will be able to fill the remaining 18 months of the Kolbeck term and run for a new six-year term in the 2012 general election (assuming the person gets the Republican convention’s nomination in 2012).

The other blank that will need filling immediately is PUC chairman. The commissioners had reverted to the gentlemanly tradition of allowing the commissioner next up for re-election, regardless of party, to serve as chairman for the two years leading to the election. That was Kolbeck. Hanson is vice-chairman and is midway of his second term. Nelson was appointed in January to fill the vacancy left by Johnson’s departure to become Daugaard’s chief of staff. Whether the chairmanship goes to Nelson — he’s on the 2012 ballot too, assuming he is nominated next summer, for election to the remaining four years of Johnson’s term — or defaults to Hanson as the only experienced hand among the bunch will be worth watching. Nelson and Hanson are both professionals with a record of putting good government first, so don’t look for the PUC to become overly politicized even with three Republicans.

Until Barack Obama was elected president, the U.S. misery index — the sum of the national unemployment rate and the national inflation rate — hadn’t been above 12 since 1990. The May number was 12.67. That’s not good news. It’s up from 10.63 in January, and it’s risen four months in a row so far this year. The May number is just short of the 12.72 of December 2009. The last time things were this bad for so long nationally was the fall and winter of 1990-91. Before that was the truly long period of inflation and recession that lasted more than a decade from the early 1970s through the mid-1980s.

Below is the text of the latest “An Ear to the Ground” column sent to the South Dakota news media from state Agriculture Secretary Walt Bones. It’s worth reading because of the interesting demographic and financial points.

All too often, I become consumed with some of the day to day happenings on the farm. I’m sure you have all been there – the water tank froze up, the tractor won’t start, or the cows went through that fence again. We get the “blinders” on and are so focused on the immediate task at hand that we forget about the big picture.

This is exactly the reason for the second annual Governor’s Ag Development Summit being held at the Sioux Falls convention center on June 28th and 29th.

At the request of the Governor, our first day will center on our Key Leader’s Ag Roundtable discussion. We have invited representatives from each of our commodity and farm organizations to participate in a facilitated discussion. The result will be agriculture’s unified message which will be presented to and discussed with the Governor.

After some brief remarks by Gov. Daugaard, our second day will start with a panel discussion on the current challenges and opportunities in our ag credit and financing industry. Farming and ranching are very capital intensive businesses and it is imperative that we have a good relationship with our lenders. That means that we must understand their world just as they must understand ours.

After a networking break, the discussion will focus on rural health care. The average age of our producers here in South Dakota is over 55. So, given the current costs and challenges associated with health care, our panel will focus on the availability and affordability of this vital service.

Rep. Kristi Noem will deliver the keynote address at the noon luncheon, followed by our final panel focusing on agriculture from the industry’s perspective. This will be an excellent time to look into the future of agriculture.

After another networking break and wrap up, we will convene to the Governor’s Ag Banquet starting with a 5 p.m. social followed by dinner at 6 p.m. Lt. Gov. Matt Michels will deliver the evening address followed by the presentation of the first SD Governor’s Ag Ambassador Award.

We look forward to having you join us. This is an example of one of the many projects that our SD Department of Agriculture’s Ag Development team works on. For further information and banquet reservations, please visit our website at: http://sdda.sd.gov/registration/.

One of my goals as Secretary of Agriculture is to be accessible and responsive to our producers and constituents. If you have an issue you’d like to discuss, please call me at 800-228-5254 or email me at agmail@state.sd.us.